What is the best way to get a £2000 Loan?

Looking to get a £2000 loan?

You might have noticed that quite a wide range of funding options are available to you. It can often be overwhelming sifting through different loans, trying to make sense of each option, and finding the right loan for you. Generally, the most popular loans among those taking out of £2000 tend to be personal loans.

How much does a £2000 loan cost?

Loan Repayment Example

Loan Repayment Example

Let’s work through the example of a loan of £2,000 taken out over 5 years (60 months) with an annual APR of 12.5%. We’ll determine the monthly repayments, including both capital and interest.

Loan Details

  • Loan amount: £2,000
  • Annual Percentage Rate (APR): 12.5%
  • Loan term: 5 years (60 months)

Steps to Calculate Monthly Repayments

  1. Convert the annual interest rate to a monthly interest rate:

    \( r = \frac{12.5\%}{12} = \frac{0.125}{12} \approx 0.01042 \)

  2. Determine the number of monthly payments:

    \( n = 5 \times 12 = 60 \)

  3. Plug the values into the formula:

    \( M = P \frac{r (1 + r)^n}{(1 + r)^n – 1} \)

    Where:

    • \( M \) is the monthly repayment
    • \( P \) is the loan principal (initial amount)
    • \( r \) is the monthly interest rate (annual rate divided by 12)
    • \( n \) is the number of payments (loan term in months)
  4. Calculate step-by-step:
    1. \( (1 + r)^n = (1 + 0.01042)^{60} \approx 1.81940 \)
    2. \( r (1 + r)^n = 0.01042 \times 1.81940 \approx 0.01895 \)
    3. \( (1 + r)^n – 1 = 1.81940 – 1 = 0.81940 \)
    4. \( M = 2000 \times \frac{0.01895}{0.81940} \approx 2000 \times 0.02311 \approx 46.22 \)

Monthly Repayment

The monthly repayment is approximately £46.22.

Summary

If you take out a loan of £2,000 over 5 years with an APR of 12.5%, your monthly repayment would be approximately £46.22. This amount includes both the repayment of the loan principal and the interest. Over the 5-year period, you will make a total of 60 payments.

Please note: Calculations are based on the interest rate being fixed over the term, and no repayments are missed. Please note that many lenders will apply their best loan rates for loans between £5,000 and £25,000 and for lower amounts you will pay a higher rate of interest.

Use our loan calculator to get a current bespoke quote.

Compare the market to get a £2,000 loan deal!

Can I Get a £2,000 Personal Loan?

A personal loan tends to be more straightforward than other forms of finance. As the loan is unsecured, it does not require you to put an asset (such as your home) down as security against the loan. Most banks and other lenders offer personal loans, and you can typically expect to borrow between £1,000 and £25,000 over a relatively short period (compared to a secured loan).

Personal loans can be taken out for a range of different reasons, and lenders tend to specialise packages depending on whether you wish to use the loan for home improvements, car purchase, debt consolidation etc.

Can I get a £2,000 Homeowner Loan

A secured loan (also known as a second charge loan) is a loan that you take out with a particular asset of yours (usually your home) put up as security. As a result, legally speaking, the creditor from whom you are borrowing the money will retain legal ownership of the asset in question until you repay the loan.

Secured loans can be used for almost all legal purposes. As they tend to have larger borrowing amounts and longer repayment terms, secured loans are commonly used for home improvements, home extensions, and debt consolidation. Typically, secured loan lenders have a minimum loan size of £3,000, and many start at £5,000.

You might also wish to consider other types of borrowing besides personal and homeowner loans, such as authorised overdrafts and credit cards.

Considerations before taking out a £2000 loan

It is important to shop around when looking for a loan.

However, depending on your personal circumstances, some options are likely to be more suitable for your needs than others. Before committing to a loan we strongly recommend that you compare the market in looking at your loan options.

We provide a loan calculator on this site. For secured loans, business loans and bridging loans you should speak to a qualified loan broker who can evaluate your situation and provide you with unbiased, expert advice to make the right decision for you.